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Microloan Startup Tala Raises $110 Million In New Funding

Tala, a Los Angeles startup that makes microloans to consumers and small business owners in emerging markets, is announcing today that it has raised $110 million in funding. The new Silicon Valley venture capital firm RPS Ventures, cofounded by Kabir Misra, former managing partner at Softbank’s $100 billion Vision Fund, is leading the round. Tala’s backers include PayPal, billionaire Steve Case’s VC firm Revolution, Chris Sacca’s Lowercase Capital and Data Collective, among others. The new funding values Tala at nearly $800 million, according to an investor. Tala has raised more than $200 million in equity investment to date.

Shivani Siroya, 37, founded Tala in 2011 after stints as an investment banking analyst and as an analyst at the U.N. Population Fund, where she did socioeconomic research. Tala’s mobile app lets people in Kenya, the Philippines, Tanzania, Mexico and India take out small loans ranging from $10 to $500. Most use the app to invest in their small businesses, like shops and food stands. To evaluate borrower risk, Tala uses cell phone data instead of credit scores, looking at loan applicants’ habits, like whether they pay their phone bills on time.

Siroya first launched Tala’s app in Kenya in 2014. Today it has more than four million customers who take out three to six loans a year at a 10% average monthly interest rate. Its 600 employees are spread across offices in Santa Monica, Kenya, Mexico, the Philippines and India. The company made Forbes’ Fintech 50 list earlier this year.

Tala’s closest competitor is Branch, a five-year-old San Francisco company led by Matt Flannery, who previously cofounded donation crowdfunding platform Kiva.org. Branch has four million customers and an average monthly interest rate of 15%. Earlier this year, it raised $70 million in equity financing from investors like Visa and Andreessen Horowitz, plus $100 million in debt. Tala also raised $100 million in debt over the past year to help fund its loans.

With its new capital, Tala plans to make a bigger push into India and expand to new countries, potentially in regions like West Africa, Southeast Asia and Latin America. It also plans to launch new products. In Kenya, Tala has already tested a micro health insurance offering that would cover customer visits to a hospital. It expects to launch its first microinsurance product in the next 12 months. It has also piloted a financial education and coaching program, and it plans to test additional products over the next year.

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Jeff Kauflin

I cover fintech, cryptocurrencies, blockchain and investing at Forbes. I’ve also written frequently about leadership, corporate diversity and entrepreneurs. Before Forbes, I worked for ten years in marketing consulting, in roles ranging from client consulting to talent management. I’m a graduate of Middlebury College and Columbia Journalism School. Have a tip, question or comment? Email me jkauflin@forbes.com or send tips here: https://www.forbes.com/tips/. Follow me on Twitter @jeffkauflin. Disclosure: I own some bitcoin and ether.

Source: https://www.forbes.com/

Trust: How do you earn it? Banks use credit scores to determine if you’re trustworthy, but there are about 2.5 billion people around the world who don’t have one to begin with — and who can’t get a loan to start a business, buy a home or otherwise improve their lives. Hear how TED Fellow Shivani Siroya is unlocking untapped purchasing power in the developing world with InVenture, a start-up that uses mobile data to create a financial identity. “With something as simple as a credit score,” says Siroya, “we’re giving people the power to build their own futures.” TEDTalks is a daily video podcast of the best talks and performances from the TED Conference, where the world’s leading thinkers and doers give the talk of their lives in 18 minutes (or less). Look for talks on Technology, Entertainment and Design — plus science, business, global issues, the arts and much more. Find closed captions and translated subtitles in many languages at http://www.ted.com/translate

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When investors encounter tough days in the stock market, they need a game plan for how to respond, Jim Cramer told his Mad Money viewers Friday. That means knowing what type of selloff you’re dealing with and how best to navigate it. Fortunately, history can be your guide in identifying those inevitable moments of weakness and keep you from panicking.

Stocks finished down Friday, as Donald Trump’s recent threat to levy 10% tariffs on an additional $300 billion of Chinese imports overshadowed the latest U.S. jobs data.

The Dow Jones Industrial Average, which hit a session low of 334 points, finished down 98 points, or 0.37%, to 26,485. The S&P 500, which saw its worst week of the year, fell 0.73% and the Nasdaq dropped 1.32%. The Dow had its second worst week of the year as it fell 2.6%.

Cramer told his viewers that the U.S. stock markets have only seen two truly horrendous selloffs since he began trading in 1979. Those were the Black Monday crash in October 1987 and the rolling crash of the financial crisis from 2007 through 2009. But while both of these declines saw huge losses, they were in fact very different.

Many investors don’t remember Black Monday, where the Dow Jones Industrial Average lost 22% in a single day. Even fewer remember that the market lost 10% during the week prior, and continued its losses on the Tuesday after. While it wasn’t known at the time, this crash was mechanical in nature, caused by a futures market that overwhelmed the ability to process the flood of transactions. In the confusion, buyers stepped aside and prices plunged.

The carnage wasn’t stemmed until the Federal Reserve stepped in with promises of extra liquidity. But in the end, the economy was strong. There was nothing wrong with the underlying companies, the market just stopped working. That’s why it only took 16 months to recover to their pre-crash levels.

Investors witnessed similar mechanical meltdowns in the so-called “flash crash” of 2010 and its twin in 2015. On May 6, 2010 at precisely 2:32 p.m. Eastern, the futures markets again overwhelmed the markets, only this time machines were doing most of the trading. The crash lasted for a total of 36 minutes, during which time the Dow plunged 1,000 points from near the 10,000 level.

In August of 2015, another flash crash occurred at the open, with the Dow again falling 1,000 points in the blink of an eye. In the confusion, traders couldn’t tell which prices were real and which ones were pure fantasy. Only those with strong stomachs risked trading at the heart of the decline, but those traders were rewarded handsomely.

In all of these cases, Cramer said, the machinery of the markets was broken. Even the circuit breakers put in place after 1987 were not able to stem the declines and in fact, did very little to even slow them down. But for those investors who were able to recognize what was actually happening, these declines were a once- (well, twice-) in-a-lifetime gift.

Cramer and the AAP team are making three more trades as they reposition on this week’s selloff, including Burlington Stores, (BURL – Get Report) and Home Depot (HD – Get Report) . Find out what they’re telling their investment club members and get in on the conversation with a free trial subscription to Action Alerts Plus.

The Great Recession

The Great Recession was a totally different animal. The market began falling in October 2007, but didn’t bottom until March 2009, almost two years later. Afterwards, it took until March of 2013, four years later, for the markets to get back to even. Cramer said this kind of decline is the most dangerous, but fortunately, it’s truly a once-in-a-lifetime event, only occurring every 80 years or so.

The Great Recession was caused by the Fed raising interest rates 17 times in lock step, trying to cool an already cooling economy. The recession could have been avoided had the Fed done their homework and actually talked to CEOs, as Cramer did at the time.

Cramer recalled talking to the CEOs of banks, all of whom told him that defaults on mortgages were on the rise in a fashion none of them had seen before. Cramer’s famous “They know nothing” rant on CNBC stemmed from those conversations, as the Fed did nothing until the first banks began to collapse. The market fell 40% before finally finding its footing.

How can investors identify this type of devastating decline? Cramer said investors can ask whether the economy is on a solid footing. Is business declining? Is employment falling? Are interest rates still rising even as cracks are appearing? If big companies are unable to pay their bills, the problem could be a lot deeper than you think.

On Real Money, Cramer keys in on the companies and CEOs he knows best. Get more of his insights with a free trial subscription to Real Money.

Today’s Market

Today’s market is not like 2007, however, Cramer said. Business is stronger, our banking system is stronger and there’s still time for the Fed to take their foot off the brakes and wait for more data before proceeding.

So you’ve just spotted a mechanical breakdown in the market, what should you buy? Cramer said he’s always been a fan of accidental high-yielders, companies whose dividend yield is spiking because their share prices are falling with the broader averages.

He said that these stocks are always among the first to rebound, as their dividends help protect them. He advised always buying in wide scales as the market declines. That way, if the rebound is swift, you’ll still make a little money, but if it’s a larger, multiday sell off, you’ll make even more.

Cramer reminded viewers that when the Fed is cutting interest rates, almost every market dip is a buying opportunity. But when it’s raising rates, things get tricky. Not every rate hike causes a crash, however, only ones that push rates high enough to break the economy.

During these times, it’s important to remember that stocks aren’t the only investment class out there. You can also invest in gold, bonds or real estate to stay diversified.

It’s Not Just the Fed

The Fed isn’t the only reason why the market declines, and Cramer ended the show with a list of the other common culprits.

The first sell-off culprit are margin calls. Too often, money managers borrow more money than they can afford and when their bets turn south, they are forced to sell positions to raise money. We saw this happen in early 2018 when traders were betting against market volatility by shorting the VIX. When volatility returned, these traders lost a fortune and the whole market suffered.

There are also international reasons for the market to sell off, including crises in Greece, Cyprus, Turkey and Mexico, among others. Cramer said in these cases, it’s important to ask whether your portfolio will actually be impacted by these events. Usually, the answer is no.

Then there’s the IPO market. Stocks play by the laws of supply and demand after all, so when tons of new IPOs are hitting the markets, money managers often have to sell something in order to buy them. Declines can also stem form multiple earnings shortfalls as well as, yes, political rhetoric coming from Washington.

Cramer said many of these declines happen over multiple days. The key is to watch if the selling ends by 2:45 p.m. Eastern. If so, it may be safe to buy. But if not, there will likely be more selling the following day and it will pay to be patient.

By: Scott Rutt

Search Jim Cramer’s “Mad Money” trading recommendations using our exclusive “Mad Money” Stock Screener.

To watch replays of Cramer’s video segments, visit the Mad Money page on CNBC.

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Source: More Selloff Strategies: Cramer’s ‘Mad Money’ Recap

What Is Berkshire Hathaway and What Does It Do in 2019

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It may come as a surprise just how many subsidiaries Berkshire Hathaway – a multinational conglomerate and holding company led by Warren Buffett – actually owns.

As the most expensive stock you can own (with Class A shares at well over $300,000 (BRK.A – Get Report) ), Berkshire Hathaway has certainly cemented itself into the international market as one of the biggest public companies out there. In addition to its pricey shares, Berkshire Hathaway is one of the top performing companies in the market, and either fully owns or owns controlling interests in dozens of major companies – including the likes of Geico, Fruit of the Loom and Dairy Queen.

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Growing from its beginnings in the textile industry, the company now has reach into a diverse portfolio of industries and sectors – from tech to food.

But, what is Berkshire Hathaway, and what does it do?

What Is Berkshire Hathaway?

Berkshire Hathaway is a multinational holding company and conglomerate run by investor, chairman and CEO Warren Buffett. The company was originally a textile manufacturer, but now owns or holds controlling interests in dozens of big companies including Heinz, Benjamin Moore, Geico and more. The holding company is the most expensive stock on the market.

As a diversified holding company (and multinational conglomerate), Berkshire Hathaway has invested in or acquired dozens of companies and holdings over the years. In addition, Berkshire Hathaway also has its own subsidiaries in the insurance and home services industries.

As headed up by the prolific Buffett, Berkshire Hathaway is one of the largest and most successful conglomerates in the world – with a hefty market cap of over $516.5 billion as of April 2019.

But, how did the holding company achieve its world-class reputation (and astounding market cap)?

Berkshire Hathaway History

Founded through the merger of Massachusetts firms Hathaway Manufacturing Company (incorporated 1888) and Berkshire Cotton Manufacturing Company (incorporated 1889, later changed to Berkshire Fine Spinning Associates in 1929) in 1955, Berkshire Hathaway Inc. is based in Omaha, Nebraska.

The company was later taken over by Buffett’s investment group in 1965, and quickly rose to prominence through Buffett’s strategy of value investing – by buying up stock or companies that were undervalued. Buffett transformed an initially struggling textile manufacturing company into what is one of the biggest and most expensive conglomerates and stocks in the world.

Berkshire Hathaway originally (and still today) held a lot of insurance companies, including National Indemnity Company and National Fire & Marine Insurance Company (now a part of National Indemnity), acquired in 1967, as well as Geico, acquired in 1996. By 1985, Buffett liquidated the company’s textile operations, and solidified its transition into a holding company.

Since then, Berkshire Hathaway has kept a diverse portfolio, buying interests or whole companies in food, clothing, transportation and even tech.

So, what companies does Berkshire Hathaway own or invest in?

Berkshire Hathaway Subsidiaries

As a holding company, Berkshire Hathaway owns or has a large stake in dozens of big companies – including both public and private companies. As of 2018, Berkshire Hathaway fully owned some 50 subsidiaries.

Berkshire Hathaway Companies

Berkshire Hathaway owns several companies that bear its name, including Berkshire Hathaway HomeServices of America, Berkshire Hathaway Direct Insurance Company, Berkshire Hathaway Automotive, Berkshire Hathaway Energy Company, Berkshire Hathaway Homestate Companies and more.

In addition, the holding company owns dozens of other companies, including BNSF Railway, Duracell, MedPro Group, Geico, Clayton Homes, Benjamin Moore & Co., HomeServices of America, Lubrizol Corporation, Acme Brick Company and many more.

Apart from the companies Berkshire Hathaway actually owns, the conglomerate holds large investments in several other companies – including some of the biggest public names on the market.

Berkshire Hathaway Holdings

Berkshire Hathaway has considerable investments in various companies – from tech to transportation and more. According to the company’s latest 13F-HR filing with the Securities and Exchange Commission, these include:

Apple (AAPL – Get Report)

Bank of America (BAC – Get Report)

Wells Fargo (WFC – Get Report)

Coca Cola (KO – Get Report)

Goldman Sachs (GS – Get Report)

Delta Airlines (DAL – Get Report)

American Express (AXP – Get Report)

General Motors (GM – Get Report)

Costco Wholesale Corp. (COST)

Verizon Communications Inc. (VZ – Get Report)

Johnson & Johnson (JNJ – Get Report)

Proctor & Gamble Co. (PG – Get Report)

U.S. Bancorp (UBS – Get Report)

VeriSign, Inc. (VRSN – Get Report)

American Airlines Group Inc. (AAL)

Visa, Inc. (V – Get Report)

JP Morgan Chase & Co. (JPM – Get Report)

USG Corp. (USG)

Suncor Energy Inc. (SU – Get Report)

These are just a few of the biggest companies Berkshire Hathaway owns shares of in 2019.

Berkshire Hathaway Stock

Berkshire Hathaway (BRK.A – Get Report) boasts the market’s most expensive stock to own – with Class A shares setting you back some $315,300 per share in April 2019.

The conglomerate also has Class B shares (BRK.B – Get Report) – which are much more affordable, trading at around $210 in 2019. Both of the company’s classes of stock trade on the New York Stock Exchange.

And although the stock has recently taken a bit of a hit (dropping slightly in the past six months), Berkshire Hathaway has generally performed remarkably well – climbing from around $175,000 in December 2013 to over $315,000 in April 2019. And historically, Buffett saw the company through its stock trading at just $19 in 1964 to its now astronomical $315,000-plus price tag.

Additionally, Berkshire Hathaway’s stock performed over two times better than the S&P 500 index from 1965 to 2018.

But apart from the stock’s steady rise over the years, Berkshire Hathaway has taken a bit of heat recently – especially over Berkshire Hathaway-owned Kraft Heinz (KHC – Get Report) , which has seen about a 43% drop since October of last year. According to recent reports, Buffett acknowledged that Berkshire Hathaway may have “overpaid” for their investment in the food company.

In addition, some reports critique Berkshire Hathaway’s holdings in Wells Fargo (who has also seen poor performance recently as well) as part of the company’s stock’s recent slight decline.

Still, the company’s stock (specifically their Class B shares) has outpaced the S&P 500 for years. As of last year, the largest institutional shareholder of Berkshire Hathaway’s Class A stock is FERI Wealth Management.

What Does Berkshire Hathaway Do?

Berkshire Hathaway invests in and holds dozens of major public and private companies. As part of its portfolio, the company also owns and operates several self-titled companies, including Berkshire Hathaway HomeServices of America and Berkshire Hathaway Direct Insurance Company. But apart from its branded companies, Berkshire Hathaway does quite a bit more than provide insurance.

In 2019, Berkshire Hathaway’s companies and holdings contribute a variety of commodities and services to the market – including producing computers and electronic products, providing insurance, producing clothing, serving food products, automotive products and services and much more.

Although the company originally started out primarily in the textile industry, Berkshire Hathaway has grown to become a conglomerate that invests in a diverse group of major companies, and provides the prime example of Buffett’s famous value investing strategy.

It’s never too late – or too early – to plan and invest for the retirement you deserve. Get more information and a free trial subscription to TheStreet’s Retirement Daily to learn more about saving for and living in retirement. Got questions about money, retirement and/or investments? We’ve got answers.

By: Anne Sraders

Source: https://www.thestreet.com/investing/stocks/what-is-berkshire-hathaway-14929353

Crypto Investment App Abra to Restrict Service for US Users Over Regulatory Uncertainty

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Cryptocurrency investment app Abra has revealed it’s set to restrict services for users in the United States over continued regulatory uncertainty.

According to a blog post the company published. It’ll adjust its offering in the country in an effort to “continue to be compliant and cooperative with US regulations as they currently exist.” This means Abra users in the US will see the firm restrict its services.

The blog post reads:

As a part of this effort we are migrating any synthetic assets to a native hosted wallet solution. On Abra, these are defined as anything other than Bitcoin (BTC), Ether (ETH), Litecoin (LTC) and Bitcoin Cash (BCH).

As such, users in the US will no longer be able to hold QTUM, bitcoin gold (BTG), Status (SNT) and OmiseGO (OMG) on the platform after August 29. Those who have positions in these cryptocurrencies are advised to withdraw their funds before said date, as any remaining balances will be automatically converted to BTC.

Those in New York will be more affected than others, as they will no longer to able to use wire transfers, bank Automated Clearing House (ACH), Or American Express cards to deposit and withdraw funds from Abra’s app.

Users outside of the country will reportedly not be affected by the changes. The move comes months after Abra launched a service that allows users to gain exposure to some of the most popular stocks and exchange-traded funds (ETFs) in the world using bitcoin.

The service also allows users to gain exposure to indexes like the S&P 500 and the Russell 2000. This won’t, however, give them ownership of the assets themselves, meaning those who use the app to invest won’t, for example, receive dividends from stocks.

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SoftBank Launches New $108 Billion Vision Fund To Invest in AI

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Softbank Group Chairman Masayoshi Son Press Conference — SoftBank founder, chairman and CEO Masayoshi Son.

NurPhoto via Getty Images

SoftBank stunned the venture capital world with its launch of the $100 billion Vision Fund in 2017 and its wide-ranging and aggressive investments. Now billionaire Masayoshi Son has announced an even larger fund with $108 billion to invest in artificial intelligence companies.

Announced on Thursday, the “SoftBank Vision Fund 2” will be the biggest tech fund in the world if it comes to fruition. “The objective of the Fund is to facilitate the continued acceleration of the AI revolution through investment in market-leading, tech-enabled growth companies,” SoftBank Group wrote in a filing with the Tokyo Stock Exchange.

SoftBank has upped its own stake in the new fund to $38 billion from the $25 billion in the original fund and has tapped leading tech companies like Apple, Microsoft and Foxconn, along with Japanese investment investment banks and Kazakhstan’s sovereign wealth fund.

One noticeable omission from the second fund is Saudi Arabia’s sovereign wealth fund, which pumped $45 billion into the first Vision Fund. SoftBank has faced criticism over its ties with Saudi Arabia and Crown Prince Mohammad Bin Salman following the grisly murder of journalist Jamal Khashoggi in the Saudi Consulate in Istanbul.

However, SoftBank said discussions are ongoing with additional participants, so it’s possible Saudi Arabia will still participate in the second fund, while the total money raised may top $108 billion.

SoftBank used the first fund to make aggressive billion dollar investments into an eclectic range of technology companies around the world leading to some questioning the rational of the legendary investor and SoftBank founder Masayoshi Son. Uber, DoorDash, and WeWork have all been backed by the fund, European startups Improbable in the U.K. and travel booking website GetYourGuide in Germany.

The SoftBank Vision Fund, run out of an office in London’s exclusive Mayfair neighbourhood, is led by Son and Rajeev Misra, a banker who previously worked at UBS, Deutsche Bank and Merrill Lynch.

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Sam Shead

I’m a Staff Writer covering tech in Europe. Previously, I was a News Editor for Business Insider Australia, and prior to that I was a Senior Technology Reporter for Business Insider UK. My writing has also appeared in The Financial Times, The Telegraph, The Guardian, Wired, The Independent, and elsewhere. I have also appeared on the BBC, Sky News, Al Jazeera, Channel 5, Reuters TV, and spoken on Russia Today and Shares Radio. In 2015, I was shortlisted for Technology Journalist of the Year by the UK Tech Awards and in 2016 I was nominated as one of the 30 young journalists to watch by MHP Communications.

Source: SoftBank Launches New $108 Billion Vision Fund To Invest in AI

Yields Up To 9.9% That Rich Guys Don’t Want You To Know About

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Not yet as rich as you always wanted to be? Don’t worry, because today we’re going to dial you in for some “rich guy” dividend favorites that’ll pay you up to 9.9% every year.

Private equity is a lucrative and secretive world. It’s often limited to accredited investors, which means these funds require you to have $200,000 or more in annual income to qualify.

If you’re living on dividends alone, this might be challenging. Fortunately, there are some private equity plays that you can buy just like individual stocks. They trade for as cheap as $12 per share and they’ll pay you dividends from 8.8% to 9.9% along the way:

Contrarian Outlook

Private equity (PE)—funds that can invest in the equity and debt of privately held companies, which we typically can’t get our hands on—is generally touted as outperforming the stock market.

The American Investment Council, which advocates for private investment, points out that research from the 1990s and early 2000s showed that “private equity outperformed public markets by 3 to 4 percent each year,” and a 2019 paper investigating more recent “vintage years” finds that “that private equity continues to generate returns that are 2 to 3 percent above the returns of public markets.”

The downside? Privately held private equity firms aren’t exactly easy to tap, and you typically need to have seven digits to get in.

But here’s a back door that you and I can access. We can buy PE-esque investments just like regular stocks with a single-click! The trick is handful of little-known publicly traded companies called business development companies (BDCs).

Congress created BDCs in the 1980s to spur investment in America’s small and midsize businesses, the same way they created REITs in the ‘60s to help mom ‘n’ pop investors tap the real estate markets. And like REITs, BDCs get a generous tax break—if they dole out 90% or more of their profits as dividends to you and me.

Thus, business development companies not only let us access a big pool of investments you and I otherwise couldn’t otherwise dream of accessing, but also deliver sky-high yields that are among the highest you can find in the stock market. The caveat, of course, is that they do come with heightened risk, and not all BDCs are gems.

Today, I’ll show you three notable BDCs—yielding between 8.8% and 9.9%—that should be on your radar screen.

PennantPark Floating Rate Capital (PFLT)

Dividend Yield: 9.7%

Let’s start out with a yield juggernaut: PennantPark Floating Rate Capital (PFLT), which will get investors awfully close to a double-digit yield at current prices.

PennantPark provides access to middle market direct lending with, as the name implies, a heavy focus on floating-rate loans, though it’ll invest anywhere across the capital structure (senior secured debt, subordinated debt and others).

Its primary target is private equity sponsor-backed companies with $10 million to $50 million in EBITDA. It avoids capex-heavy businesses, as well as fickle industries such as fashion and restaurants, but it still has plenty of sectors to play with. Portfolio companies include the like of primary-clinic operator Cano Health, marketing services provider InfoGroup, and WalkerEdison, whose furniture can be found online via companies such as Amazon.com (AMZN), Target (TGT) and Home Depot (HD).

PennantPark typically leans toward the low-risk but low-reward end of the BDC spectrum, which historically has served it just fine. However, the BDC’s last earnings report raised some credit-quality concerns. The company reported that four of its portfolio companies were on “non-accrual,” which essentially happens when a payment is more than a month overdue, or there’s some other concern about a company’s ability to make a payment.

The BDC was subsequently nailed in May on the news. That has me wary. And the floating-rate nature of its loans, while attractive during periods of rising rates, isn’t a significant advantage right now.

New Mountain Finance

Dividend Yield: 9.9%

New Mountain Finance (NMFC) targets companies middle-market companies, too, investing between $10 million to $50 million across the debt spectrum in businesses that generate annual EBITDA between $10 million and $200 million.

NMFC likes to say that it invests in “defensive growth” industries. It’s a silly, contradictory term, sure. But the qualities it covets in its portfolio companies are, in fact, pretty attractive: high barriers to competitive entry, recurring revenue, strong free cash flow and niche market dominance.

To be fair, New Mountain, like PennantPark, is heavily weighted toward floating-rate loans, which make up 93% of the portfolio. But NMFC is a few steps in the right direction. Its credit quality is stellar – only eight portfolio companies have gone on non-accrual since inception in 2008, and there were no new non-accruals over this past quarter. Better still, the company is a bastion of consistency when it comes to covering its healthy dividend with net interest income (a core measure of profitability for BDCs).

New Mountain, which trades at only a sliver of a premium to its net asset value right now, still should be fine in the current environment. Keep this BDC in mind should the Fed’s hawks ever take over again.

Ares Capital (ARCC)

Dividend Yield: 8.8%

Ares Capital (ARCC) is a slightly more modest yielder compared to the previous two picks, and you likely won’t snag it for a significant discount. But that’s OK—ARCC is worth a small premium.

I’ve beat the drum on ARCC a few times, including in February 2019, but also going back more than two years, in January 2017. I said at the time that the company’s investment spread, as well as a $3.4 billion merger with American Capital, “should benefit ARCC in just about any market environment,” and that “in short, ARCC is going places.”

Ares Capital, Wall Street’s largest BDC, invests primarily in first and second lien loans and mezzanine debt of middle-market companies. A high priority is placed on “market-leading companies with identifiable growth prospects that can generate significant cash flow.” Its portfolio of roughly 345 companies touches numerous sectors, including business services, food and beverage, healthcare, IT and light manufacturing.

Ares’ core earnings and net realized gains have exceeded dividends every year since 2011, by increasingly wide margins. In fact, the company’s operational performance has been so robust that it has hiked its payout twice since this time last year.

Bottom line: ARCC is a standout in what typically is a difficult industry to invest in.

However, I’m not sure I’d commit capital to this stock right now. Given its recent run up, I’d like to see a pullback for a lower risk entry point.

Brett Owens is chief investment strategist for Contrarian Outlook. For more great income ideas, click here for his latest report How To Live Off $500,000 Forever: 9 Diversified Plays For 7%+ Income.

Disclosure: none

Brett Owens

I graduated from Cornell University and soon thereafter left Corporate America permanently at age 26 to co-found two successful SaaS (Software as a Service) companies.

Source: Yields Up To 9.9% That Rich Guys Don’t Want You To Know About

The Greatest Fund Managers Midyear Review

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An updated spreadsheet of the greatest fund managers is available to download at the link at the end of this article.

At the midpoint of the year, it’s time to review the performance of the greatest fund managers. I have received many emails from readers asking how to use the spreadsheet listing the greatest fund managers that I make available for download. Many readers start by sorting the spreadsheet by year-to-date returns. Let me explain why that does not get you to funds I would recommend as top choices.

The top 3 funds on the spreadsheet sorted by year-to-date (YTD) return are Kinetics Internet (WWWFX) up 38.47% YTD, Virtus Zevenbergen Innovative (SAGAX) up 36.58% YTD, and Artisan Mid Cap (ARTMX) up 33.95% YTD. Here’s how I look at each of them.

Kinetics Internet

Murray Stahl has been at the helm for 18 years. For the last 10 years, he has beaten his category benchmark by 0.26% a year — including the past 6 months of stellar returns. If you invested $10,000 in this fund 10 years ago, you would have beaten the category benchmark by $263.06. Beating his benchmark for 10 years is an achievement for Stahl, but the outperformance is not enough to make a difference for investors.

Virtus Zevenbergen Innovative

Brooke de Boutray has managed this fund for 11 years. Over the last 10, she beat her category benchmark by 3.21% a year which translates to an additional $3,715.69 return on a $10,000 investment over 10 years — that’s more like it. The only problem is the fund has a hefty 5.75% load. Although the manager has proven her skill, I would prefer not to pay a load unless there was no other alternative.

Artisan Mid Cap Investor

James D. Hamel has managed the fund for 10 years, outperforming his benchmark by 1.19% a year which means Hamel added $1,255.79 over 10 years on a $10,000 investment on top of the benchmark return.

My Take: The best evidence of a manager’s skill is the margin of outperformance over a market cycle (10 years minimum). The bigger the gap between the manager’s return and the benchmark the more confident you can be of a manager’s skill.

Stahl’s outperformance of 0.26% a year, is better than about 98% of mutual fund managers, but it is not large enough to be compelling. I leave him on the spreadsheet because he may be the best one available in many 401k plans, but he would not be among my top choices.

Even when a great manager outperforms by a large margin (as Boutray did) the fund company can make it a bad choice for investors by loading up the fees. I leave Boutray’s fund on the spreadsheet, because a lot of 401k plans only offer load funds. In that case, Boutray’s fund could be your best choice, even if it would not be among my top choices.

Hamel’s Artisan Mid Cap Fund is the best of these three, but there may be others what have performed slightly less well year-to-date but with much bigger margins over their benchmark for the past 10 years. There is a trade-off to make between recent returns and long-term returns. I will do a deep dive on this next time.

Click here to download the most recent spreadsheet listing all the funds that passed muster.

To see previous articles in this series, click here.

Follow me on Twitter or LinkedIn. Check out my website.

Ken Kam

I am the CEO and founder of Marketocracy, Inc.,and portfolio manager at Marketocracy Capital Management, LLC. My firm maintains a database of the world’s greatest

Source: The Greatest Fund Managers Midyear Review

Why HOURBULL Still Running As A Best E-Currency & Crypto Investment Company In The UK

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Source: https://hourbull.com

DoorDash Is Now Worth $12.6 Billion After New $600 Million Investment

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The investor feeding frenzy around food-delivery startups hasn’t stopped. Just three months after raising $400 million, DoorDash confirmed it has closed another $600 million with New York City hedge fund Darsana Capital Partners leading the round. That’s an extra billion in its war chest so far this year, and half of the total of $2 billion raised for the San Francisco startup since its founding in 2013. The new funding round increases DoorDash’s post-money valuation from $7 billion to $12.6 billion, according to cofounder and CEO Tony Xu.

“This allows us to pull forward the future sooner,” Xu tells Forbes. “It’s helpful to raise capital, especially when the macroclimate seems to be a bit choppy.”

That external turbulence has shaken some of DoorDash’s competitors in what’s already a cutthroat market. Tensions around U.S. and China trade talks have put the markets in a precarious state, affecting stock in publicly traded Grubhub (2018 revenue: $1 billion). Postmates, which announced that it had confidentially filed to go public in February, still has not made its filings public or started an IPO roadshow. Uber’s public debut in early May was disappointing. Shares are trading below its initial pricing. But Xu isn’t shaken, even after seeing Uber or other consumer tech IPOs falter in the public markets. “The short answer is that it hasn’t had an impact on how we thought about our business or how we’ve thought about our future,” Xu says.

Investors clearly haven’t been spooked, either. Last week, Amazon announced it was leading a $575 million in London-based Deliveroo, bringing its total funding to $1.5 billion.

“Capital accrues to the winners in markets that people think are growing,” says Sequoia’s Alfred Lin, a board member whose firm has invested in every round since the Series A. “You don’t just get money because lots of money is in the system.”

Three years ago, it didn’t look like DoorDash would become the delivery darling. In 2016, DoorDash raised a down funding round, after investors lowered the share price. and a slew of other delivery startups failed in the months following. That’s changed, and now DoorDash’s market share has surpassed Postmates and Uber Eats in the U.S. (Uber Eats operates internationally and did $1.48 billion in revenue in 2018 globally.)

“There’s no doubt that this a competitive environment,” Lin says. “They’ve shown that they can come from behind and win.”

DoorDash now has an extra $600 million in firepower to continue gaining market share in the U.S. and Canada, the only two markets in which it operates. Xu won’t disclose revenues (and his company still isn’t profitable), but he says the company’s gross bookings run rate in March was on pace for $7.5 billion, which indicates gross bookings in March were around $625 million. The Information previously reported the company planned to raise capital. In addition to Darsana, new investor Sands Capital and existing investors Coatue Management, Dragoneer, DST Global, Sequoia Capital, Softbank Vision Fund and Temasek Capital Management also participated.

Xu says the money won’t be going into fueling a price war with its rivals. He’d rather focus on market expansion and what he calls DoorDash’s next billion-dollar business, DoorDash Drive, which delivers for businesses like Walmart.

“Our growth has not come on the back of any discounts,” he said. “I think that’s why investors have continued to approach us in an excessive fashion since the beginning of 2018.”

Click here for details on how to send Biz information anonymously. Follow her on Twitter at @bizcarson or email her at bcarson[at]forbes.com.

Biz Carson

Forbes Staff

I’m a San Francisco-based staff writer for Forbes with a focus on Uber, the sharing economy, and startups.

Source: DoorDash Is Now Worth $12.6 Billion After New $600 Million Investment

Fidelity Will Offer Cryptocurrency Trading Within a Few Weeks

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Fidelity Investments, which began a custody service to store Bitcoin earlier this year, will buy and sell the world’s most popular digital asset for institutional customers within a few weeks, according to a person familiar with the matter.

The Boston-based firm, one of the largest asset managers in the world, created Fidelity Digital Assets in October in a bet that Wall Street’s nascent appetite for trading and safeguarding digital currencies will grow. It also puts Fidelity a step ahead of its top competitors that have mostly stayed on the sidelines so far. The firm said in October that it would offer over-the-counter trade execution and order routing for Bitcoin early this year.

Fidelity would join brokerages E*Trade Financial Corp. and Robinhood in offering cryptocurrency trading to clients, though Fidelity is only targeting institutional customers and not retail investors like E*trade and Robinhood, said the person, who asked not to be named discussing private matters. A study released by Fidelity on May 2 found that 47 percent of institutional investors think digital assets are worth investing in.

“We currently have a select set of clients we’re supporting on our platform,” Fidelity spokeswoman Arlene Roberts said in en email. “We will continue to roll out our services over the coming weeks and months based on our clients’ needs, jurisdictions, and other factors. Currently, our service offering is focused on Bitcoin.”

Fidelity closer to offering crypto trading

According to the survey, which questioned 441 institutional investors from November to February, 72 percent prefer to buy investment products that hold digital assets, while 57 percent choose to buy them directly.

The hurdle to make crypto appeal to more mainstream investors is that it continues to be plagued with fraud, theft and regulatory infractions. The latest case involves the New York attorney general accusing Bitfinex, one of the largest Bitcoin exchanges, of hiding the loss of about $850 million in client and corporate cash. Vancouver-based Quadriga Fintech Solutions Corp., which is going through bankruptcy in Canada, owes 115,000 clients about $193 million in cryptocurrencies and cash after the death of founder Gerry Cotten last year.

Bitcoin has jumped more than 50 percent this year, extending the wild price swings that have attracted many individual investors to the mostly unregulated coin. The original digital currency gained widespread notoriety when it surged 1,400 percent in 2017, before tumbling 74 percent last year.

Source: https://www.bloomberg.com/news/articles/2019-05-06/fidelity-said-to-offer-cryptocurrency-trading-within-a-few-weeks

Category: Investment Facts

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